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2026-10-12 12:32:59 Daiwa became more confident in the earnings outlook of BABA-W (09988.HK)'s cloud business. It forecast cloud revenue for 2FQ ending September 2026 to hike more than 50% YoY. At the EBITA level, the broker projected cloud profit to largely offset losses from the AI lab as early as 3FQ, marking an important milestone in the group's AI investments and earlier than previously expected. Daiwa forecast BABA-W's e-commerce earnings to remain resilient, while Quick Commerce losses are narrowing. Although domestic consumer sentiment remains weak, the broker believed platform earnings are stable. Higher average order value and stronger non-food penetration are expected to improve unit economics and support further narrowing of Quick Commerce losses. The broker raised its EPS forecasts for FY2027-29 by 2-3% to reflect improved earnings prospects for the cloud. It reiterated a Buy rating and maintained the TP at HKD180. ~ AASTOCKS Financial News Website: www.aastocks.com | |